Michael Hendrix of the U.S. Chamber of Commerce Foundation recently chatted with Greg Jaros, the CEO of Spare to Share, to discuss the company's involvement in the "sharing economy."

Below is an edited transcript of that interview.

Tell me about Spare to Share and the idea behind it.

Spare to Shareis a private sharing and community network for residential buildings. We offer an easy way for residents to connect and socialize through the sharing of skills, items, and activities. They use our web and mobile platforms within a closed, trusted building community. It’s an excellent way to share or sell all kinds of things, including tools, tickets, a parking space, and even pet sitting. We help make your building a little more neighborly and connected by enabling communication and sharing among residents.

Property managers see us as an amenity they can offer to residents to enhance the community feeling in the building, and as a way to communicate with residents using tools they are accustomed to (mobile, alerts, etc.). Residents who know other residents tend to stick around a little longer, reducing churn and vacancy leading to real costs savings as well as an overall happier building. These connected residents also become more loyal and take better care of the building, helping reduce maintenance and management costs.

Why do residents use Spare to Share?

Say you’re in a building and you have a guest coming over for the weekend and you have to borrow a parking spot. You can see that there are a bunch of empty parking spots but you don’t know who’s coming back and you don’t know what’s available. Wouldn’t it be nice if you could reach out and say, “Hey, could I borrow your parking spot for the weekend?”

Other people use Spare to Share for selling things in their building. They’re much more comfortable selling their chair or couch to someone in the building than having to meet a stranger. Some have said they have to hang a shelf and could use some tools, but also think it would be better if they could find somebody to help them hang the shelf.

The social aspect comes up a lot too. People want to be connected in these apartment communities. People move in from out of town and they don’t really know a lot of people. They love the idea of meeting people. But social things can sometimes be tough to get into, so it’s a lot easier when there’s a need.

What sparked the idea for Spare to Share?

We didn’t start exactly in this space. For me, it was a need that sparked the idea.

I was throwing a party for my daughter’s 8th-grade graduation, and my wife is very good at networking and borrowing things by picking up the phone and calling her friends. So we found coolers and yard games and all sorts of things for the party. But what we couldn’t find was a canopy tent for the backyard. So I went out to Home Depot and spent $200 on a new tent. The first person who came to the party looked at the tent and said, “Hey, I have that same tent in my garage at home. You should have just borrowed mine!”

At that point, it all just clicked. He didn’t know what I needed, and I didn’t know what he had. It was just surprising to me as a technology guy that somebody hadn’t already created a virtual inventory of stuff that people have that other people would be willing to share, rent, or sell to people they know.

I started to look around and was noticing what was going on in the sharing economy with AirBnB and the car sharing companies out there, and yet I didn’t see anyone doing anything in the smaller ticket space. So, that’s how I started the business. I thought, I’m going to try to create this virtual network of stuff inside zip codes. That was the first iteration of Spare to Share. It was strictly a marketplace for stuff.

As we rolled this concept out a couple of years ago, we realized it was a lot harder to do than it seemed. It felt like we should be able to say, “I’m comfortable lending my ladder to my neighbor,” but it doesn’t work that way. Just because someone lives in your zip code doesn’t mean you would be comfortable lending them your ladder. You trust the neighbors you know and see regularly. We had some good success with a handful of people who were just very social and wanted to help their neighbors or be sustainable, but a lot of other people got nervous.

Where it was working best was in closed, trusted groups where people knew each other already. That led us to residential buildings and commercial buildings. Our customers were using Spare to Share the most there. So the lesson for us was, rather than trying to create trust where it didn’t exist across entire neighborhoods, let’s instead leverage the trust that already existed and was not already being leveraged within closed trusted groups.

When you look at other darlings of the sharing economy, what do you see as being Spare to Share’s fundamental differences and similarities to these other firms?

The big commonality is this idea of leveraging idle assets. I think that's the key to all these kind of companies. You have something that has utility, such as your car or your apartment or your skills. Technology is helping people to reduce risk in these transactions by creating transparency, and allows them to get the word out about what they have to offer.

We started out with items that have lower financial value. The idea of piggybacking off of the same market that AirBnB has gets a little bit problematic because it’s not really the same kind of animal. Someone might incur the risk of allowing a stranger to sleep in their spare bedroom, because that risk is mitigated by the financial gain. But if you’re lending a drill to somebody, you're not really talking about enough financial gain to mitigate the risk. You have to find a better way to make it worth it to people.

Our users are not motivated by finance; in fact, it's a goodwill transaction. You’re not going to charge your neighbor five dollars to borrow your ladder or to get the leaves out of the gutter. That's not how the transaction works. It's more about being neighborly while retaining ownership. If you look at eBay or Craigslist, there's no option where you can continue to own the item.

Spare to Share has tighter groups, hyper local networks, and is not based on the financial gain of its transaction but on goodwill and helping neighbors, friends, and coworkers.

I wanted to get your sense on the notions of density and community. How have they influence the growth of your business?

For any of these two-sided networks, they need people. Density is important. It’s not like Facebook where everybody's going to come every day and check it out. People will come when they need something, and the city has to be dense enough to support that behavior.

The nice thing about our business—being in these hyper-local networks—is that we don't have to say that the only markets that will work for Spare to Share are in Chicago, New York, or San Francisco, because those are the only ones that are big enough. We are hyper local, so we just need a dense enough area, such as a building with 300 units in it. That's enough for this kind of a community network. People are all in the same place, live there, their stuff is there, and are anxious for community there.

If there's an area where people are very transient, that'll certainly be a tougher sell. They're only going to want to use our system during those few moments when they need something. That sort of a community is not going to be as vibrant as one where residents are willing and anxious to meet their neighbors. So the ideal is a town where people just moved in, such as one with a lot of young adults who have just finished college and are moving into the big city.

The timing is also very good. Chicago Mayor Rahm Emanuel is very interested in turning Chicago into a startup hub. There are nice pockets of startup activity. And there are great schools here. There’s University of Chicago and DePaul creating entrepreneurship programs, trying to nurture students and the environment around them. And our business in particular is in the sustainability category at the same time that the city is rolling out efforts like Divvy Bikes.

There’s another side to the coin, which is that the Midwest mentality is a little more conservative than on the West Coast. For example—in my opinion—financing startups may be a little tougher in Chicago. When we got started, everybody was asking, “Where are you going to get your revenue from? Get your revenues first. Once you have your 10,000 users and you have your revenue stream then we can start thinking about giving you money.”

When we travelled around the country a little bit, and certainly in San Francisco and Silicon Valley and still even a little bit in New York, they were a little more open to the idea of funding a wild idea that might turn into something. That kind of interest just wasn’t there at all in Chicago.

Chicago’s a great environment for any startup, but if you are a startup that’s saying, “We’re going to get a million users and figure out how to monetize later,” you’re probably going to need to go to San Francisco rather than Chicago the way the environment is today.

What you’re also getting at is a broader notion of culture, right?

We all love Chicago in spite of the craziness in the state and local government. But it is a Midwest mentality, and the culture is to get a solid business, get a solid revenue stream, and grow that way. There’s a set path that companies take. If you’re going to be a little bit off that path, it may be a little more challenging for you.

It also relates to the view of risk and failure, right?

I think that’s right. But it’s also a question of whose view is that. It’s the VCs and the funders in Chicago who can pick and choose the companies that are a little farther along to invest in.

You can absolutely start any kind of business in Chicago in my experience. The ones whose revenue is a little more down the road are more challenging to start up here.

You talk about capital, but what has it been like finding talent?

The talent has been great in Chicago. In any city finding tech talent now is challenging. In this environment, there’s lots of great startup energy. People with ideas are feeling empowered and motivated and pushed along to get their ideas going, and many of those are starting tech companies. There are great, creative, smart, and hard-working young people coming out of the many colleges here—

But I think the kind of challenge that you’ll see—except perhaps in San Francisco—is that we need more tech co-founders. That is what the schools are focusing on now. DePaul, my alma mater, has some great technology programs. Still, as we go to these startup events we see more and more non-technical founders looking for technical co-founders, and that is the challenge.

There are a lot of people who want to be part of a startup. We can find people who are willing to work for less, or for equity, because of the dream of what a startup could be or who are passionate about the idea. That’s been great for us as well as for many other startups in town.

Do you see the universities really making a good effort of building a pipeline of talent?

The universities are absolutely aware of the excitement in the startup world and what their students want it. They are very nurturing of ideas. Indeed, I was just a judge for a startup event at the Coleman Entrepreneurship Center at DePaul University. And there is a great startup contest, the New Venture Challenge at University of Chicago Booth School of Business. They have so many great areas they are working in and are trying to forge the startup environment as much as possible. Are they building a pipeline for talent? Yeah, I think they are.

It’s not even at the college level alone. The event I was a judge at recently was for Chicagoland high school students in entrepreneurship programs. And that is really impressive to me. So the school districts are thinking about it—everybody is thinking about it.

Startups are great ways to create jobs and as well as generate wealth. And all the young people want that; they want the dream of a million dollar startup, plus the ability to work on their own terms. And the schools are trying to help nurture that.

Thinking about the country, but perched atop your Midwestern startup, what sense do you have for America’s broader startup economy as well as its competitiveness and growth potential? Some have expressed concern, others seem more sanguine. What’s your perspective?

I’m very bullish about our startup future. Our parents saw themselves working in one company for a career. My kids and the students I see these days don’t think like that at all. They think, “Let’s create our own opportunities.” I see that everywhere. I do a lot of traveling with this business, and I don’t feel like there’s just one part of the country that’s more or less this way. It’s not geography. The next generation is all about creating their own opportunities with their own startups.

I guess I can’t really compare the United States to other countries. I hear about things happening in other countries. But what I see happening in the United States is creating all sorts of value.

I don’t know if there are ways that the government can influence that more or not; I’m not sure about that. But the kids coming out of college and even high school are already thinking about how they are going to create their own business and the next great idea.

I’m feeling very bullish ab out the country in general when it comes to startups. I don’t see anything that would make me think that people are nervous or not courageous enough. But it is more around the youth instead of the middle aged and older. The youth are ready to try something and not worry if they fail. Whereas the older generations have a little bit more risk if they fail.

Speaking of being positive, what do you see as the future of Spare to Share?

We are very excited. Every time we talk to our customers and prospects, they keep telling us, “This is great! You should also do this, you should also do that.” And that’s good and that’s bad. We have to focus, like all companies, to avoidbeing distracted from our main goals

We’re focusing on serving our primary market, which is residential buildings. For us, it’s about putting blinders on and just trying to focus on residential and get great at it. Our plan is to own the Chicago market, and then move upstream to the property management companies and have them help push Spare to Share across the country.

And then from there we can focus more on condo and community associations, co-working spaces, commercial spaces, student housing, military housing, and senior housing. They are very similar, but require a slightly different sale.

If there’s an international property management company and we’re in their Chicago building, then maybe they can help us get into Europe or South America and go from there. But we put those dreams back in our pocket. Job one is to get great at building community within residential properties in Chicago.

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Gregory Jaros is founder & CEO of Spare to Share, a private sharing and community network within residential & commercial buildings. Mr. Jaros is also advisor at OpenMarkets Health in Chicago. Prior to this Mr. Jaros was a co-founder of Diamond Management Consultants (IPO 1997, acquired by PWC 2010), and most recently was Chief Information Officer of PayNet, Inc. Mr. Jaros received his MBA from University of Chicago Booth School of Business, and his Bachelor's degree from DePaul University.